Should you refinance your home now?

(ARA) - There's no two ways about it: mortgage rates are low right now. In fact, they're lower than they've been in decades, making this not only a great time to consider buying a home, but also an opportune time for homeowners to refinance.

But is refinancing always the right thing to do?

When interest rates change in your favor, it's important to keep in mind your long-term personal finance goals. First, you'll want to take stock of your financial situation and reflect on where you want to be in the long run. With a clear vision of your needs and intentions, you can wisely consider some reasons to refinance, and clearly evaluate the decision in relation to your personal financial objectives.

Here are some great reasons to refinance:

1. Refinance to maximize your monthly budget
By refinancing, you can lower your monthly payment. This means there's more money each month for you and your family to spend on other expenses. Maybe you have a life changing event approaching - such as a new baby on the way - or need to save for a new car. Whatever the case, refinancing is great way to squeeze more juice out of your income.

2. Refinance to get out of debt
Debt such as credit cards and student loans are often at much higher interest rates than current mortgage rates. It's wise to shift your debt to a lower interest rate via your home's equity. With a cash-out refinance, you can pay down those high-interest credit cards, and you'll pay less interest to banks in the long run.

Shifting your debt could save you thousands of dollars in interest, depending on your current debt load. If your home has equity and you also have credit card debt, you'd be wise to look into refinancing,

3. Refinance to position yourself for the future
Maybe you're one of the lucky homeowners who is comfortable with your current payment, and are relatively debt free. Even so, the fact remains that rates are low.

But what goes down must come up, and rates are bound to creep back up as the economy recovers. Locking in a low rate now could pay off for years in the future. Right now could literally be the chance of your lifetime to get the lowest rate possible.

If you have an adjustable rate mortgage, it's especially important to consider locking in a low rate now to avoid a higher adjustment later. While it's true that adjustable rate mortgages are currently adjusting down, this trend may reverse in coming months if the economy rebounds as expected.

4. Refinance to cash-in on your assets
If your home has equity, that's an asset you could be putting toward other expenses or investments in your life. Refinancing allows you to turn your largest asset, your home, into cash that might be better used for other things.

For instance, maybe you're considering furthering your education in order to get a higher paying job. Cashing in on the equity of your home can allow you to make strategic moves like this, not only for your own financial bottom line, but to help you meet your goals for self-improvement and happiness.

No matter what your hopes for your finances are, keep in mind that persistence, discipline, and smart decisions are your most important tools for success, and QuickenLoans.com can help you reach your goals.

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